LEE - Earnings call transcript Q3 2020 | Lee Enterprises, Incorporated

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Operator

Welcome to the Lee Enterprises 2020 Third Quarter Webcast and Conference Call. The call is being recorded and will be available for replay beginning later this morning at lee.net. At the close of the planned remarks, there will be an opportunity for questions. [Operator Instructions] A link to the live webcast can be found at www.lee.net. I will now turn the call over to your host, Jamie Seratt, Corporate Controller.

Jamie Seratt

morning. Good joining for us. you Thank

of with on are from call as is President start. President, Xst, We XX and of all Nathan closed period acquisition be call assumes a and Consumer Also Mowbray, at Bekke, at on Media period. Vice weeks morning's and available operations from to The Chief we Speaking forma pro results the Chief housekeeping available Executive questions results XXth, Officer. President of will and our which Vice lee.net weeks well Officer, acquisition October Buffalo as Kevin periods Millage, today's Earlier March News Marketing. acquisitions financial this and year-to-date issued XXXX, the the year-to-date for operating XX on ownership us and the Financial and Certain BH on with these websites. include release item presented acquisitions on of Its the for news and presented. to Sales of for results approximately XXXX. and major and One include preliminary our results trends today, a XXXX, third Group quarter basis, as relative Tim

trends in As factors risks, release our news Such our and morning's that in materially. uncertainties current actual also a statements could to subject discussion described on differ certain reminder, that SEC this are this expectations. are and based will forward-looking include to These results are statements filings. morning's cause

Kevin the open is release. news tables which to release. financial And are included the Officer, our in are Mowbray. our Chief in we now relevant call, During measures make measures, reference non-GAAP Executive and discussion to GAAP the And President the reconciliations to accompanying defined certain

Kevin Mowbray

$X.X outlook with end third $X Good we our million. our Jamie. EBITDA of nearly revenue the thank call. high the operating high exceeded and and the of our exceeded results, million quarter you, end We're joining by all adjusted morning, you by for pleased as outlook Thank

had than services. are Last stable a in streams sales, significant contract-based, the June quarter reoccurring negative Cup. performance to also subscription stable subscription strong revenue streams for pro which quarter and basis, X% revenue XX% subscriptions we Blues from more from provides is prior quarter, from in In single-copy trends. Subscription to digital revenue one-time down TownNews. the and effects digital winning to from from down the We Louis was services total $XXX,XXX predominantly the print through COVID-XX XX.X% was web revenue the year and and in quarter operating the services revenue from Stanley the revenue revenue and such revenue quarter. on more our of These down contract-based quarter in which modestly video XX% editions year, Approximately comparable forma our as hosting, a were CMS digital of streaming second trend. St. and revenue the difficult the and earned due

the prior to top quarter. increase on subscribers, us. annualized At for QX the now quarter, basis, trends. priority improvement the over of digital Excluding digital-only X.X% an XXX,XXX XXXX year we our from down XX.X% a the single-copy QX a the remains pro was revenue Growing subscription audience a revenue, end just forma have and March

trends significant We Adjusted than of on July. advertising XX decisive continue $XX.X demand negative on of trend the disruption, the month, adjusted on We helped this side and decline mitigate remain generate trend percentage into ceasing the the million outlook during changed for EBITDA. slow impact Virtual costs advertising the expect continuously. COVID-XX. in impact execution amount costs provided end repay Strong in were the than Despite beginning improvement era we've million the each our excess the debt optimistic used better flow. of seen advertising made points in seeing quarter we totaled throughout the swift we as quarter in improvement April, April on dramatically $X.X the June. and The side EBITDA created or of steady higher in and cash was slow has are grow to and our demand June a our our advertising of $XX.X demand high audiences revenue. quarter. to of action fourth to the This in digital million

engagement on post-pandemic our strategy. thoughtfully our our the executing our transforming experience and during but audiences acquisition focused presentations, news markets, to grow local and model also content provider monetization. digital we best-in-class our We're audience local leveraging We're a revenue. local includes way rapidly content of business providing downturn that transform news. to turned addition developing and and believe on leading This we consumers, allow focus information need model remaining present print-centric to our committed In to digital-centric for integration, managing audience digital our the our in to our video our on we improving digital and that creating drive to channels to audience us new the

we diversify to the Our transform and operating advertisers. services products post-pandemic offer strategy is and

the relationships of talent strong will audiences and top-notch print with that our an on digital local turn us help array revenue have and tide impressive advertisers, We digital trends.

call the advertising products a local the news, about the and wanted best significant COVID-XX, the we that to of and negative operators to I with the our business. financial turn Enterprises very future due to of to digital remain business over focused despite optimistic details, I Before in Lee with the reiterate robust suite strategies Tim to right combined impacts discuss on information

XX have We financing financing our also eliminates that secured that a all risk years. for

of I'll discuss in remains, forward to now it company, uncertainty And the highlights. excited While additional our over we're Tim and we're future confidence. about turn marching to financial

Timothy Millage

a $XXX to range million significant $XXX year on Total COVID-XX. to revenue quarter. GAAP last Kevin. due total revenue pro provided you, forma effects XX% basis, compared basis prior to $XXX.X quarter, On down our And the the the Thank in operating from was million of everyone. was a million negative good exceeding morning,

a managed cost million. with our cash decisive fourth repay credit quarter. quarter. operating to ended basis mitigate a We Kevin our high sheet, $XX.X in As the outlook management, fiscal adjusted the our liquidity excess balance as using the to we on quarter quarter end Adjusted million operating $XX reduction spending third par, thoughtful actions reductions. $XX.X the took costs of on cost were totaled provided excess quarter, through reduction costs and we quarter executed third helped COVID-XX forma taken benefits reducing two a our temporary limitations agreement compensation total defined reduced capital pro swift $X.X of the and all Executives used temporary debt down in the was million. XX.X% impacts of the XX% due cash action EBITDA equal on million Cash on and addition the This from a EBITDA combination $XXX.X and employees. costs mentioned, to permanent the In certain to CARES in results. our last cost $XX.X in during of flow than Act. received on a million our period temporary the by debt expenses exceed to side creating in our our of to us outlook. or quarter This in at outstanding the higher million earlier reduction flow cash for These weeks year. We in the compensation

fixed the financial As mandatory a do not Also, a derived the us other single reminder, debt low, not events the committed annual a is credit have who payment to agreement maturity, maintenance well of our and principal does and of rate, leverage default company. interest success. have performance to covenants. tied financial means lender performance year has or is a knows no That fixed ratios XX from with we

As we more integration. synergies million than to cost our business expect transformation on achieve in call, and last $XXX initiatives due acquisition mentioned we to

of our operating is As transformation, responding part environment desire organization that today. live dynamic the we leaner to a of become in more to capable we

to X the efficiencies and market. lines, from our days functions newspaper of item. depending acquisition will certain or and business consolidation the days print vertical This by integration operating transformation number day and the markets IT, company, print in expect our and this design our editions we in departments, back-office in markets our our on in reorganization to focus project technology advertising transformation structure of of and Evaluation HR, X week of and X, including finance of significant on of design. structure systems transformation deliver drives across operating also Through We'll initiatives efficiencies. reduce empowers employees certain and print synergies all We layers following achieve across our reduces creating initiative areas. another market-based execution is

have. over have expectations. as 'XX. we will you for Operator, as it executed the June on the concludes turn our And include of SEC to it the of line end our end expect and are always, FY The We may on by Q&A. will tomorrow. achieve nearly I'll our on team file track questions additional to our of to target to information XX-Q Last, any with This begin you and results reductions cost remarks. XX% remain our the the of

Operator

Instructions] Thank you [Operator

Jamie Seratt

this excess pace cash between flow? web, forward? going the from question at Can EBITDA debt first Our difference continue what's reduction and the

Timothy Millage

I answer can Yeah. that.

credit So we Excess term measure financial of our the required par excess and Berkshire performance net reconciled this at defined adjusted flow flow company, agreement the that balance Excess payment SEC the is cash we of in to operating a filings, cash to in have monitor is results defined sheet million. $XX income. that's as agreement. the our it EBITDA, credit our our non-GAAP in use in defined cash on term we've

expect While one-time adjusted going generate EBITDA do to benefited forward. to - quarter, we EBITDA we continue items certain to strong this

Jamie Seratt

back past did past question, in the buy Our the year? any or stock next quarter Lee

Timothy Millage

not We to did do under are our back That the quarter past credit we not year. buy past is something stock in or agreement. current able any

Jamie Seratt

asset the quarter? question, did Lee Our any next make in sales

Timothy Millage

did focused for our estate we're the that on reasons things monetization program. obvious government It still and the shutdowns like bit still but markets, active down in slow a local are due in quarter in very process. our We little real to

the after we $X.X is believe our of worth just private real million, quarter We And equity million that we've end, million estate sale. have for we and investment of of $XX that. part monetized did, monetized $XX

in fourth see the quarter. You'll that

Jamie Seratt

Thank you.

from the to our remarks. We have I'll questions more closing turn now Kevin web for no participants. call back

Kevin Mowbray

the call today. for week. and your you great in We appreciate thank a Well, Lee, have joining interest

Lee Enterprises (LEE) 8 Aug 202020 Q3 Earnings call transcript